ConocoPhillips to sign deal on Amborip VI block

ConocoPhillips to sign deal on Amborip VI block

Leony Aurora, The Jakarta Post/Jakarta

U.S. energy giant ConocoPhillips will sign a contract to explore
and develop Amborip VI oil and gas block in the Arafura sea in
Papua in early December, a government official says.

All the technical problems encountered for the block, offered
through a direct-offer mechanism, have been solved, Ministry of
Energy and Mineral Resources' director of exploration and
production Novian M. Thaib said on Friday, without elaboration.

"We plan to sign the contract early next month," he said.

The government signed contracts with eight other tender
winners of directly offered blocks in early October.
ConocoPhillips was the only company whose contract signing was
postponed.

According to the ministry's data, ConocoPhillips will get 35
percent of all oil produced in Amborip VI and 40 percent of gas
output, after tax. The company has made a commitment to spend
US$1.5 million on geological study and to drill two wildcat
wells, as well as awarded a signing bonus of $1.25 million.

The government will also announce the winners for 14 oil and
gas blocks -- that were offered through regular tender in the
first round of bidding in July -- in December, Novian said.

Next month, the government will also open the second round of
bidding with 18 blocks, mostly onshore, offered through the
direct-offer mechanism.

Ten more blocks, including ones in the Strait of Malacca,
Natuna Sea and the eastern part of Indonesia, will be presented
through a regular tender, Novian said.

To attract more investors, the government has scrapped value-
added taxes and import duties for all capital goods during
exploration and exploitation periods.

It also raises the split offered to contractors from the usual
15 percent for oil to between 20 percent and 35 percent for
fields in remote areas.